Guarantor financial information | N. Guarantor financial information The $500.0 million aggregate principal amount of 6.75% senior notes due 2023 co-issued by Ferrellgas, L.P. and Ferrellgas Finance Corp. are fully and unconditionally and jointly and severally guaranteed by all of Ferrellgas, L.P.’s 100% owned subsidiaries except: (i) Ferrellgas Finance Corp; (ii) certain special purposes subsidiaries formed for use in connection with our accounts receivable securitization; and (iii) foreign subsidiaries. Guarantees of these senior notes will be released under certain circumstances, including (i) in connection with any sale or other disposition of (a) all or substantially all of the assets of a guarantor or (b) all of the capital stock of such guarantor (including by way of merger or consolidation), in each case, to a person that is not Ferrellgas, L.P. or a restricted subsidiary of Ferrellgas, L.P., (ii) if Ferrellgas, L.P. designates any restricted subsidiary that is a guarantor as an unrestricted subsidiary, (iii) upon defeasance or discharge of the notes, (iv) upon the liquidation or dissolution of such guarantor, or (v) at such time as such guarantor ceases to guarantee any other indebtedness of either of the issuers and any other guarantor. The guarantor financial information discloses in separate columns the financial position, results of operations and the cash flows of Ferrellgas, L.P. (Parent), Ferrellgas Finance Corp. (co-issuer), Ferrellgas, L.P.’s guarantor subsidiaries on a combined basis, and Ferrellgas, L.P.’s non-guarantor subsidiaries on a combined basis. The dates and the periods presented in the guarantor financial information are consistent with the periods presented in Ferrellgas, L.P.’s condensed consolidated financial statements. FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING BALANCE SHEETS (in thousands) As of October 31, 2019 Ferrellgas, L.P. Ferrellgas (Parent and Finance Corp. Guarantor Non-Guarantor Co-Issuer) (Co-Issuer) Subsidiaries Subsidiaries Eliminations Consolidated ASSETS Current assets: Cash and cash equivalents $ 29,732 $ 1 $ — $ — $ — $ 29,733 Accounts and notes receivable, net 7,891 — 30 115,920 — 123,841 Intercompany receivables (7,736) — — — 7,736 — Inventories 84,995 — — — — 84,995 Prepaid expenses and other current assets 50,426 — — — — 50,426 Total current assets 165,308 1 30 115,920 7,736 288,995 Property, plant and equipment, net 598,887 — — — — 598,887 Goodwill, net 247,195 — — — — 247,195 Intangible assets, net 108,493 — — — — 108,493 Investments in consolidated subsidiaries 55,600 — — — (55,600) — Operating lease right-of-use assets 124,047 — — — — 124,047 Other assets, net 72,517 — 2,255 671 — 75,443 Total assets $ 1,372,047 $ 1 $ 2,285 $ 116,591 $ (47,864) $ 1,443,060 LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) Current liabilities: Accounts payable $ 44,421 $ — $ — $ — $ — $ 44,421 Short-term borrowings 80,000 — — — — 80,000 Collateralized note payable — — — 73,000 — 73,000 Intercompany payables — — — (7,736) 7,736 — Current portion of long-term debt 2,230 — — — — 2,230 Current operating lease liabilities 33,832 — — — — 33,832 Other current liabilities 178,086 — 13 (2,000) — 176,099 Total current liabilities 338,569 — 13 63,264 7,736 409,582 Long-term debt 1,731,920 — — — — 1,731,920 Operating lease liabilities 88,773 — — — — 88,773 Other liabilities 36,915 — — — — 36,915 Contingencies and commitments Partners' capital (deficit): Partners' equity (803,335) 1 2,272 53,327 (55,600) (803,335) Accumulated other comprehensive loss (20,795) — — — — (20,795) Total partners' capital (deficit) (824,130) 1 2,272 53,327 (55,600) (824,130) Total liabilities and partners' capital (deficit) $ 1,372,047 $ 1 $ 2,285 $ 116,591 $ (47,864) $ 1,443,060 FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING BALANCE SHEETS (in thousands) As of July 31, 2019 Ferrellgas, L.P. Ferrellgas (Parent and Finance Corp. Guarantor Non-Guarantor Co-Issuer) (Co-Issuer) Subsidiaries Subsidiaries Eliminations Consolidated ASSETS Current assets: Cash and cash equivalents $ 11,045 $ 1 $ — $ — $ — $ 11,046 Accounts and notes receivable, net (3,912) — 35 111,473 — 107,596 Intercompany receivables (5,650) — — — 5,650 — Inventories 80,454 — — — — 80,454 Prepaid expenses and other current assets 42,158 — (1) — — 42,157 Total current assets 124,095 1 34 111,473 5,650 241,253 Property, plant and equipment, net 596,724 — (1) — — 596,723 Goodwill, net 247,195 — — — — 247,195 Intangible assets, net 108,557 — — — — 108,557 Investments in consolidated subsidiaries 52,999 — — — (52,999) — Other assets, net 65,447 — 2,875 783 — 69,105 Total assets $ 1,195,017 $ 1 $ 2,908 $ 112,256 $ (47,349) $ 1,262,833 LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) Current liabilities: Accounts payable $ 33,252 $ — $ — $ 112 $ — $ 33,364 Short-term borrowings 43,000 — — — — 43,000 Collateralized note payable — — — 62,000 — 62,000 Intercompany payables — — (192) (5,458) 5,650 — Current portion of long-term debt 277,029 — — — — 277,029 Other current liabilities 128,666 — 20 5,617 — 134,303 Total current liabilities 481,947 — (172) 62,271 5,650 549,696 Long-term debt 1,457,004 — — — — 1,457,004 Other liabilities 36,469 — 67 — — 36,536 Contingencies and commitments Partners' capital (deficit): Partners' equity (765,756) 1 3,013 49,985 (52,999) (765,756) Accumulated other comprehensive income (14,647) — — — — (14,647) Total partners' capital (deficit) (780,403) 1 3,013 49,985 (52,999) (780,403) Total liabilities and partners' capital (deficit) $ 1,195,017 $ 1 $ 2,908 $ 112,256 $ (47,349) $ 1,262,833 FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS (in thousands) For the three months ended October 31, 2019 Ferrellgas, L.P. Ferrellgas (Parent and Finance Corp. Guarantor Non-Guarantor Co-Issuer) (Co-Issuer) Subsidiaries Subsidiaries Eliminations Consolidated Revenues: Propane and other gas liquids sales $ 273,385 $ — $ — $ — $ — $ 273,385 Other 19,829 — — — — 19,829 Total revenues 293,214 — — — — 293,214 Costs and expenses: Cost of sales - propane and other gas liquids sales 134,028 — — — — 134,028 Cost of sales - other 3,681 — — — — 3,681 Operating expense - personnel, vehicle, plant and other 114,543 — — 885 (885) 114,543 Depreciation and amortization expense 19,107 — — 112 — 19,219 General and administrative expense 9,695 1 — — — 9,696 Operating expense - equipment lease expense 8,388 — — — — 8,388 Non-cash employee stock ownership plan compensation charge 795 — — — — 795 Loss on asset sales and disposals 2,235 — — — — 2,235 Operating income (loss) 742 (1) — (997) 885 629 Interest expense (35,691) — — (1,186) — (36,877) Other income (expense), net (132) — — 720 (720) (132) Earnings (loss) before income taxes (35,081) (1) — (1,463) 165 (36,380) Income tax expense 518 — — — — 518 Equity in earnings (loss) of subsidiaries (1,464) — — — 1,464 — Net earnings (loss) (37,063) (1) — (1,463) 1,629 (36,898) Other comprehensive loss (6,148) — — — — (6,148) Comprehensive income (loss) $ (43,211) $ (1) $ — $ (1,463) $ 1,629 $ (43,046) FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS (in thousands) For the three months ended October 31, 2018 Ferrellgas, L.P. Ferrellgas (Parent and Finance Corp. Guarantor Non-Guarantor Co-Issuer) (Co-Issuer) Subsidiaries Subsidiaries Eliminations Consolidated Revenues: Propane and other gas liquids sales $ 334,966 $ — $ — $ — $ — $ 334,966 Other 17,343 — — — — 17,343 Total revenues 352,309 — — — — 352,309 Costs and expenses: Cost of sales - propane and other gas liquids sales 204,136 — — — — 204,136 Cost of sales - other 3,047 — — — — 3,047 Operating expense 110,331 — — 1,017 (1,017) 110,331 Depreciation and amortization expense 18,881 — — 111 — 18,992 General and administrative expense 14,173 2 — — — 14,175 Equipment lease expense 7,863 — — — — 7,863 Non-cash employee stock ownership plan compensation charge 2,748 — — — — 2,748 Loss on asset sales and disposals 1,996 — 2,508 — — 4,504 Operating income (loss) (10,866) (2) (2,508) (1,128) 1,017 (13,487) Interest expense (34,348) — — (847) — (35,195) Other income (expense), net 19 — — 2,203 (2,203) 19 Earnings (loss) before income taxes (45,195) (2) (2,508) 228 (1,186) (48,663) Income tax expense 151 — — — — 151 Equity in earnings (loss) of subsidiary (2,282) — — — 2,282 — Net earnings (loss) (47,628) (2) (2,508) 228 1,096 (48,814) Other comprehensive loss (12,587) — — — — (12,587) Comprehensive income (loss) $ (60,215) $ (2) $ (2,508) $ 228 $ 1,096 $ (61,401) FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) For the three months ended October 31, 2019 Ferrellgas, L.P. Ferrellgas (Parent and Finance Corp. Guarantor Non-Guarantor Co-Issuer) (Co-Issuer) Subsidiaries Subsidiaries Eliminations Consolidated Cash flows from operating activities: Net cash provided by (used in) operating activities $ 21,350 $ (1) $ 506 $ (3,708) $ (11,000) $ 7,147 Cash flows from investing activities: Business acquisitions, net of cash acquired (6,400) — — — — (6,400) Capital expenditures (18,126) — — — — (18,126) Proceeds from sale of assets 835 — — — — 835 Cash collected for purchase of interest in accounts receivable — — — 161,600 (161,600) — Cash remitted to Ferrellgas, L.P. for accounts receivable — — — (172,600) 172,600 — Intercompany loan to affiliate (3,203) — — — 3,203 — Cash payments to construct assets in connection with future lease transactions (16,879) — — — — (16,879) Cash receipts in connection with leased vehicles 5,863 — — — — 5,863 Other — — — — — — Net cash used in investing activities (37,910) — — (11,000) 14,203 (34,707) Cash flows from financing activities: Distributions (101) — — — — (101) Reductions in long-term debt (512) — — — — (512) Net additions to short-term borrowings 37,000 — — — — 37,000 Net additions to collateralized short-term borrowings — — — 11,000 — 11,000 Cash payments on lease liabilities — — — — — — Net changes in advances with consolidated entities — 1 (506) 3,708 (3,203) — Cash paid for financing costs and other (1,140) — — — — (1,140) Net cash provided by (used in) financing activities 35,247 1 (506) 14,708 (3,203) 46,247 Net change in cash and cash equivalents 18,687 — — — — 18,687 Cash and cash equivalents - beginning of year 11,045 1 — — — 11,046 Cash and cash equivalents - end of year $ 29,732 $ 1 $ — $ — $ — $ 29,733 FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) For the three months ended October 31, 2018 Ferrellgas, L.P. Ferrellgas (Parent and Finance Corp. Guarantor Non-Guarantor Co-Issuer) (Co-Issuer) Subsidiaries Subsidiaries Eliminations Consolidated Cash flows from operating activities: Net cash provided by (used in) operating activities $ 11,666 $ (2) $ 19,961 $ (17,231) $ (32,000) $ (17,606) Cash flows from investing activities: Business acquisitions, net of cash acquired (4,625) — — — — (4,625) Capital expenditures (23,433) — — — — (23,433) Proceeds from sale of assets 1,061 — — — — 1,061 Cash collected for purchase of interest in accounts receivable — — — 242,912 (242,912) — Cash remitted to Ferrellgas, L.P. for accounts receivable — — — (274,912) 274,912 — Net changes in advances with consolidated entities 2,585 — — — (2,585) — Other (292) — — — — (292) Net cash provided by (used in) investing activities (24,704) — — (32,000) 29,415 (27,289) Cash flows from financing activities: Distributions (10,015) — — — — (10,015) Proceeds from increase in long-term debt — — — — — — Payments on long-term debt (281) — — — — (281) Net reductions in short-term borrowings (32,800) — — — — (32,800) Net additions to collateralized short-term borrowings — — — 32,000 — 32,000 Net changes in advances with parent — 2 (19,829) 17,242 2,585 — Cash paid for financing costs (213) — — (11) — (224) Net cash provided by (used in) financing activities (43,309) 2 (19,829) 49,231 2,585 (11,320) Net change in cash and cash equivalents (56,347) — 132 — — (56,215) Cash and cash equivalents - beginning of year 119,133 1 174 — — 119,308 Cash and cash equivalents - end of year $ 62,786 $ 1 $ 306 $ — $ — $ 63,093 |